Mr. Speaker, I am very pleased to address Bill C-16, which I am introducing jointly with my colleague the solicitor general.
Charities play a critical role in the achievement of goals, both here and abroad, that Canadians deem important. Charities provide humanitarian assistance in times of crisis. They promote the building of civil society in developing countries. They provide help to the needy and they work to respond to social concerns and problems.
To recognize this and to encourage Canadians to support charitable activities, the Income Tax Act grants significant tax privileges to charities. Charities are accountable for how they use donations. They hold the public trust and they depend on public confidence.
The bill provides the legal means to deal with any suspected abuse of charitable status by terrorist supporters who try to use charities to disguise their activities.
This bill will also guarantee that tax privileges granted to registered charities are provided only to organizations that engage in charitable activities under the Income Tax Act. Above all, it will guarantee to Canadians that their donations to registered charities in Canada will be used for legitimate purposes.
As members know, the tax incentive related to gifts to charities is administered under the charities registration process. These legislative provisions and the registration process administered by the Canada Customs and Revenue Agency are evidence of the clear intention of parliament to support, through the tax system, activities conducted for charitable purposes under Canadian legislation.
In Canada, as in other common law jurisdictions, the courts have been very clear that the pursuit of political objectives falls outside the legal bounds of charity. Any organization that operates in whole or in part to support political aims and objectives would not be eligible to receive charitable status for income tax purposes.
The use of violence or the threat of violence to achieve a political aim, regardless of the cause concerned, cannot be reconciled with the legal concept of charity. The bill before us today addresses very serious international concerns about terrorist activities.
Canada as a nation and Canadians individually do not and cannot tolerate terrorist activities. In order to maintain public trust in the treatment of charitable organizations, the government must ensure that the tax privileges available to such organizations do not benefit any organizations using violence to attain their goals.
Certain organizations which condone acts of terrorism are also involved in humanitarian assistance and community development programs. They may therefore attempt to make a distinction between that part of the organization which engages in terrorism and that part which provides humanitarian services.
This bill makes it impossible to sanitize a terrorist organization merely by keeping humanitarian activities separate from terrorist activities on the organization chart. It is naive to think that the purpose of these groups' assistance activities can be kept separate from their use of violence to attain their political goals, unless the intention is to deceive.
This bill makes it clear that Canada will not tolerate the abuse of our democratic system and institutions to promote and fund terrorism. We will not allow terrorists to obtain charity status by concealing their terrorist operations behind charitable activities.
Canada is not the only country to take steps to prevent terrorist organizations from passing themselves off as legitimate charities. In July 1996 all of the G-8 countries made a commitment “to take steps to prevent or counteract, through appropriate domestic measures, the financing of terrorists and terrorist organizations, whether such financing is direct or indirect through organizations which also have or claim to have charitable, social or cultural goals”.
The legislation is part of Canada's response to this international concern. It is not the total solution. It addresses only the issue of tax incentives that are being provided to organizations whose activities are not consistent with the concept of charity.
Such provisions do however indicate a step in the right direction. As confirmed by the report presented in 1999 by the special senate committee on security and intelligence, taxation measures applicable to charitable organizations are exposed to the possibility of abuse.
The committee pointed out that a variety of groups with terrorist affiliations are carrying out fundraising activities in Canada and that benevolent or philanthropic organizations often serve as fronts for fundraising.
The report specifically points out that such groups use the status of registered charity under the Income Tax Act to enhance their credibility. It also suggests that Canadian taxpayers may be unwittingly supporting violent political actions by these groups through donations they believed were going to provide humanitarian aid.
This is unacceptable. Canadians have every right to expect that registered charities are charitable as the term is understood by the law. We have a clear onus to ensure the integrity of the system and to take whatever steps are necessary to see that the legislative framework for the system guards against abuse.
This is what the bill does. It protects the registration of charities by providing recourse to secret information, to security information, relevant to the determination of a charity's right to receive donations providing tax relief. To this end, it in fact creates a parallel appeal process.
The automatic judicial review process will be used only when the solicitor general and the national revenue minister take steps to revoke or refuse a registration on the grounds that donations are being used to support acts of terrorism.
The proposed process will make it possible to consider all information relevant to national security in determining the status of the charity, while protecting from inappropriate disclosure delicate information on national security. The rules currently in effect requiring full public disclosure will continue to apply in all other appeals.
This bill demonstrates the government's commitment to building Canadians' trust in the voluntary sector and in the integrity of our tax administration. This is a step that should be welcomed by all concerned about our charity registration system.
To close, we cannot and will not neglect our responsibility to all Canadians to ensure tax measures relating to charitable organizations are respected and may be controlled.
This is the very foundation of public trust in tax measures applying to charities. This trust is fragile and must be protected. The bill realizes this objective.